Open your Help to Buy ISA before the 30 November 2019 deadline

If you are planning to buy your first home, and you haven’t already set up a Help to Buy ISA, you only have until 30 November, as after this date the scheme will no longer be available to new savers. If you already have an ISA account or open an account before this date, you can keep savings in your account until 30 November 2029. After this date accounts will close to additional contributions and you must claim your bonus by 1 December 2030.

In order to be eligible for the government bonus, land for a self-build or the property you are buying must be in the UK, be the only house you will own, be the house you intend to live in, be purchased with a mortgage and have a purchase price up to £250,000 (or up to £450,000 in London). You cannot use a government bonus to fund the construction of a home on land you already own.

You can open a Help to Buy ISA with a range of banks and building societies. In order to qualify for a Help to Buy ISA, you must be 16 or over, have a National Insurance Number, be a UK resident, be a first time buyer and not own property anywhere in the world.

The government will boost the savings in your ISA by 25%. This means for every £200 you save, the government will give you a £50 bonus. The maximum bonus you can receive is £3,000 and to receive this amount you need to have £12,000 saved in your ISA account. Your government bonus will be calculated based on the amount of money you have in your account when you close it. This includes both the money you have saved, and any interest you have earned on that money. The minimum government bonus is £400, which means you need to save at least £1,600 before you can claim a bonus.

The maximum amount you can save every month is £200, but in the first month after opening the account you can save an additional £1,000. Please note you can withdraw money from your Help to Buy ISA account at any time. But you can’t put all the money you’ve withdrawn straight back into the account – you’re still only able to save up to £200 in every month.

If you are planning to buy your home with a partner, you can both open a Help to Buy ISA and you could receive a government bonus of up to £6,000.

When you are close to buying your first house, you will need to advise your solicitor or conveyancer, who will then apply for the government bonus on your behalf. Once they receive the government bonus, it will be added to the money you are putting towards your first house. The bonus must be included with the funds consolidated at the completion of the property transaction. The bonus cannot be used for the deposit due at the exchange of contracts, to pay for solicitor’s or estate agent’s fees or any other indirect costs associated with buying a home. Be aware that your solicitor or conveyancer cannot charge more than £50 plus VAT to process your bonus application.

Please be aware if you also have a lifetime ISA, you will only be able to use the bonus from one to buy a house.

Leanne Humphrey